Throughout the emerging world wide financial crisis, Canadians have been fed the malarky that the major domestic Canadian banks are among the best-capitalized banks in the world. They maintain capitalization levels that exceed the minimum standards set by the Bank for International Settlements.
Ergo... Canadians have been told that we should not worry about the financial mess the Americans found themselves in.
And, as such, all of our banks are in great shape.
At least, that's what we were told in August.
In the run up to the election, our Prime Minister insisted our economy was in great shape, would not enter a recession, and that our finances were solid.
And when the election was over?
Suddenly the tune started to change... culminating with Harper's admission this week that the current economic crisis could be as dangerous as the financial collapse that began in 1929.
Did you know that the Canadian Government financial bailout - on a per capita basis - is larger than what the Americans have thrown at the crisis?
Why is that?
Could it be because one of our Big 5 banks is on the verge of collapse?
This recently inconceivable notion is now the talk of many blogs as the banks begin releasing the extent of the havoc the mortgage meltdown is causing to their bottom line.
For those keeping count, here are the total after tax charges suffered by the banks since the third quarter of 2007:
* Royal Bank has written down $1.086-billion representing 4% of its common equity.
* Scotia Bank has written down $899-million representing 4.8% of its common equity.
* Bank of Montreal has written down $638-million representing 4.2% of its common equity.
* National Bank has written down $484-million representing 10.3% of its common equity.
* TD Bank has written down $65-million representing 0.2% of its common equity.
But then there is the Canadian Imperial Bank of Commerce...
CIBC has written down $4.969-billion representing 46% of its common equity. Apparently there is another write-down of $1-Billion coming in December... raising the loss to almost 60% of its common equity.
CIBC is, apparently, teetering toward collapse.
In the United States there is another landmine similar to subprime that is about to raise it's ugly head (known as Alt-A and Jumbo Prime). Moodies estimates these exotics are going to trigger another $1-Trillion in defaults/foreclosures in the coming year.
This second earthquake is anticipated to be even more devestating to mortgage backed securities than was sub-prime.
As Prime Minister Harper said, the current economic crisis could be as dangerous as the financial collapse that began in 1929. Apparently it will be replete with similar bank failures too.
The ride has only just begun.
Ergo... Canadians have been told that we should not worry about the financial mess the Americans found themselves in.
And, as such, all of our banks are in great shape.
At least, that's what we were told in August.
In the run up to the election, our Prime Minister insisted our economy was in great shape, would not enter a recession, and that our finances were solid.
And when the election was over?
Suddenly the tune started to change... culminating with Harper's admission this week that the current economic crisis could be as dangerous as the financial collapse that began in 1929.
Did you know that the Canadian Government financial bailout - on a per capita basis - is larger than what the Americans have thrown at the crisis?
Why is that?
Could it be because one of our Big 5 banks is on the verge of collapse?
This recently inconceivable notion is now the talk of many blogs as the banks begin releasing the extent of the havoc the mortgage meltdown is causing to their bottom line.
For those keeping count, here are the total after tax charges suffered by the banks since the third quarter of 2007:
* Royal Bank has written down $1.086-billion representing 4% of its common equity.
* Scotia Bank has written down $899-million representing 4.8% of its common equity.
* Bank of Montreal has written down $638-million representing 4.2% of its common equity.
* National Bank has written down $484-million representing 10.3% of its common equity.
* TD Bank has written down $65-million representing 0.2% of its common equity.
But then there is the Canadian Imperial Bank of Commerce...
CIBC has written down $4.969-billion representing 46% of its common equity. Apparently there is another write-down of $1-Billion coming in December... raising the loss to almost 60% of its common equity.
CIBC is, apparently, teetering toward collapse.
In the United States there is another landmine similar to subprime that is about to raise it's ugly head (known as Alt-A and Jumbo Prime). Moodies estimates these exotics are going to trigger another $1-Trillion in defaults/foreclosures in the coming year.
This second earthquake is anticipated to be even more devestating to mortgage backed securities than was sub-prime.
As Prime Minister Harper said, the current economic crisis could be as dangerous as the financial collapse that began in 1929. Apparently it will be replete with similar bank failures too.
The ride has only just begun.
